“I don’t fully understand the movements in the gold price,” Ben Bernanke, Fed Chairman, June 14, 2010

What does it tell you about the Fed Chairman?  When the Federal Reserve was created one once of gold was worth $20.  Today an ounce of gold is worth $1200 [August 2012, it has been even $1600].  What does that tell you?  It does not tell you the value of gold has risen that much, but that the value of the dollar has fallen that much.

It tells you that the Federal Reserve has mismanaged the dollar so badly that one dollar has lost around 98% of its value through inflation.  Remember that inflation is a silent tax which falls hardest on those at the lowest end of the economic ladder.